New York paid $12.4 billion more in federal taxes than it received in federal spending in fiscal 2024, returning to the negative balance that had prevailed before pandemic aid temporarily reversed it, according to a new state comptroller's report.
The report released Tuesday estimates that the state generated $353.5 billion in federal taxes and received $341.1 billion in spending. That works out to about 97 cents returned for every tax dollar, compared with a national average of $1.21. The figures describe the federal fiscal year that ended Sept. 30, 2024, not current federal spending.
New York was one of 10 states with a negative balance. Its $618-per-resident shortfall ranked 45th among states on a per-capita basis, while the national balance was a positive $2,991 per resident. The figures allocate federal taxes and spending by state; they do not describe what any individual household paid or received.
The reversal was sharp. New York had a positive $17.8 billion balance in fiscal 2023. A year later, its federal tax contribution had risen $33.4 billion, or 10.4%, while federal spending in the state had increased $3.2 billion, or 1%. Comptroller Thomas DiNapoli attributed the return to a negative balance partly to the fading effects of pandemic-era federal spending.
Higher tax collections drove the gap
New York generated $17,674 in federal taxes per resident, the nation's third-highest amount and about 26% above the national average of $14,008. The state accounted for 7.4% of federal taxes allocated among the states and Washington, D.C., despite having 5.9% of the population.
Individual income taxes were the largest component, at $9,527 per New Yorker, about 35% above the national per-capita amount. Social insurance taxes and contributions, which include payments for Social Security and Medicare, totaled $5,686 per resident. Corporate income taxes amounted to $2,098 per resident, the second-highest state figure.
The report links New York's tax contribution to its higher incomes, economic strength and corporate activity. It does not conclude that federal tax rates are higher in New York; the analysis concerns taxes generated in the state and spending attributed to it.
Health and safety-net funding remain substantial
Federal spending in New York totaled $17,056 per resident, slightly above the $16,999 national average but only 25th among states. New York had ranked eighth on that measure in fiscal 2021, when pandemic programs boosted spending, compared with 24th in 2019.
Medicaid was a major source of federal support. New York received $60.8 billion, or $3,040 per resident, ranking third behind New Mexico and Kentucky and about 69% above the national per-capita amount. The comptroller said enrollment, the scope and cost of care, and federal waivers help explain the figure even though New York's basic federal Medicaid matching rate is the minimum 50%.
The state also ranked first per resident for federal rental assistance and public housing and for Temporary Assistance for Needy Families. It ranked fifth for homeless-assistance grants, sixth for food assistance through SNAP and eighth for grants serving children and families. Education funding included a fifth-place per-capita ranking for Title I school aid and 10th for Pell Grants.
Other categories pulled the balance the opposite way. New York ranked 49th per resident in federal highway spending and 44th in procurement contracts. The report also identifies comparatively low federal workforce-related spending and veterans' benefits.
Medicare spending was $3,287 per resident, 16th among states, while Social Security payments were $4,161 per resident, 38th. The Social Security figure divides all payments attributed to New York by its population; it is not the average benefit paid to a recipient.
What the comparison leaves out
The comptroller's analysis assigned about 96.8% of federal revenues and 85.6% of federal outlays to states. Most of the unassigned spending was net interest on the federal debt, estimated in the report at $879.9 billion in fiscal 2024. Customs duties, miscellaneous receipts, overseas spending and other items were also left out of the state-by-state allocation.
That accounting boundary matters: the 97-cent return compares only the taxes and expenditures the report could allocate, not every dollar in the federal budget. The report uses federal budget records, Internal Revenue Service data and other federal sources, with some estimates and adjustments by the comptroller's office. Its underlying data tables show the same $12.36 billion negative New York balance before rounding.
DiNapoli warned that federal changes affecting Medicaid, the Essential Plan and SNAP could further reduce funding available to New York, but the report does not quantify an eventual loss or say the fiscal 2024 balance reflects those later changes. His office said it will monitor how the changes affect the state as they take effect.
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